Steinhoff Said to Be Close to Buying PPR’s Conforama

Dec. 8 (Bloomberg) -- Steinhoff International Holdings
Ltd., Africa’s largest furniture maker, is close to buying PPR
SA’s Conforama chain after offering more than 1.5 billion euros
($1.98 billion) for the unit, according to two people with
knowledge of the matter.

A decision may come as soon as today, said the people, who
declined to be identified because the talks are private. Colony
Capital LLC and Goldman Sachs Group Inc.’s GS Capital Partners
also made a joint bid of more than 1.5 billion euros for
France’s second-largest furniture retailer, the people said. An
offer was also submitted yesterday by private-equity firm
Carlyle Group, said a person with knowledge of the matter.

“It’s no more or less than what we expected,” said Simon
Irwin, an analyst at Liberum Capital Ltd. in London, referring
to the sale by PPR. “The market is much more interested in
terms of what they do with the funds.” He has a “hold”
recommendation on PPR shares.

PPR is selling Marne-La-Vallée, France-based Conforama to
focus on its Gucci Group luxury-goods unit and Puma AG sporting-goods division. The Paris-based company also plans to sell the
Fnac music chain and mail-order retailer Redcats. For Steinhoff,
the acquisition would add 241 stores to the Johannesburg-based
company’s 951 retail outlets in Europe.

PPR spokeswoman Charlotte Judet declined to comment. No one
at Steinhoff could immediately be reached for comment.

Conforama ranks behind Ikea in France and also has stores
in Switzerland, Luxembourg, Spain, Portugal, Italy and Croatia.
The furniture retailer’s earnings before interest, taxes,
depreciation and amortization increased 32 percent to 83 million
euros in the first six months of 2010 as sales rose 6.2 percent.
Third-quarter sales gained 9.8 percent.

Vertical Integration

“Furniture retailing is still not a business that hugely
excites, but obviously Steinhoff think they can bring something
to it through vertical integration,” said Irwin, who doesn’t
cover the African company.

Steinhoff operates more than 50 factories in countries such
as Poland, the Netherlands, Australia and South Africa, and has
more than 1,100 retail outlets. It employs about 41,000 people.

PPR may acquire more brands to bolster its luxury and
lifestyle divisions after selling one or two of the retail
businesses, CEO Francois-Henri Pinault said Oct. 18.